The Effect on an Option's Value of a Small Change

question 57

Multiple Choice

The effect on an option's value of a small change in the value of the underlying asset is called the option:

• A)vega.
• B)theta.
• C)rho.
• D)gamma.
• E)delta.

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Definitions:

Depreciation Expense

The portion of an asset's initial cost allocated over a specific period as an expense, reflecting its usage and deterioration.

Operating Activities

Activities that relate directly to the business's primary operations, like selling products or services, as opposed to investment or financing activities.

Accounts Receivable

Money owed to a company by its clients or customers for products or services sold on credit.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, age, or obsolescence.